U.S. Government blocks MoneyGram sale to China's Ant Financial owned by Jack Ma of Alibaba - CALIPHATE MEDIA

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Thursday, 4 January 2018

U.S. Government blocks MoneyGram sale to China's Ant Financial owned by Jack Ma of Alibaba



 
The United State government through Committee on Foreign Investment (CFIUS) has blocked the acquisition of Moneygram by Ant Financial’s over national security issues. Ant Financial is an affiliate of Alibaba controlled by its founder, Jack Ma. This single action sent the shares of MoneyGram tumbling by 9 percent.
"The geopolitical environment has changed considerably since we first announced the proposed transaction with Ant Financial nearly a year ago," MoneyGram CEO Alex Holmes said in a statement.                                                     "Despite our best efforts to work cooperatively with the U.S. government, it has now become clear that [the Committee on Foreign Investment in the United States] will not approve this merger," he added.
MoneyGram, the second-largest money transfer company in the world, has a long history of dealing with multinational money transfers, dating back to the 1940s, and could have helped Ant Financial's prospects. But according to Reuters, the protection of personal data raised concerns for U.S. regulator.
Read Also: Alibaba will beat Amazon to become the first trillion-dollar internet company
 
The MoneyGram deal is the latest in a string of Chinese acquisitions of U.S. companies that have failed to clear CFIUS. They include China-backed buyout fund Canyon Bridge Capital Partners LLC’s $1.3 billion acquisition of U.S. chip maker Lattice Semiconductor Corp, China Oceanwide Holdings Group Co Ltd’s $2.7 billion acquisition of U.S. life insurer Genworth Financial Inc and Chinese buyout firm Orient Hontai Capital’s $1.4 billion acquisition of U.S. mobile marketing firm AppLovin.

Reasons For The Collapse Of The Deal
Some U.S. lawmakers, including Republican Senators Pat Roberts and Jerry Moran, had written to Treasury Secretary Steven Mnuchin, who also serves as chairman of CFIUS, to express concern that Ant Financial’s acquisition of MoneyGram could pose national security threats, arguing that the information of U.S. citizens, including military personnel, could be compromised.

The Way Forward
Alibaba and MoneyGram will instead form a "new strategic business cooperation" to expand their remittance and digital payments services in China, India, the Philippines and other Asian markets, as well as in the United States.
"Establishing this new strategic cooperation with MoneyGram will add a partner with global remittance capabilities to our ecosystem," Doug Feagin, president of Ant Financial International, said in a statement.
"While Ant Financial won't have a direct ownership relationship with MoneyGram, we look forward to working closely with the MoneyGram team to make our platform even more accessible," he added.
Any arrangements reached by Ant Financial and MoneyGram that do not involve a transaction would not be subject to review by Committee on Foreign Investment in the United States (CFIUS). 


ABOUT MONEYGRAM
 
MoneyGram International Inc. is a money transfer   company based in the United States with headquarters in Dallas,Texa.  It has an operations center and regional and local offices around the world. MoneyGram businesses are divided into two categories: Global Funds Transfers and Financial Paper Products. The company provides its service to individuals and businesses through a network of agents and financial institutions.
MoneyGram is the second largest provider of money transfers in the world. The company operates in more than 200 countries with a global network of about 347,000 agent offices.

ABOUT ANT FINANCIAL 

Ant Financial Services Group (Chinese: 蚂蚁金服), formerly known as Alipay, is an affiliate company of the Chinese Alibaba Group. Ant Financial is the most valuable fintech company in the world. It operates Alipay, the world's largest mobile and online payments platform as well as Yu’e Bao, the world's largest money-market fund. It also runs the Sesame Credit,a credit rating system. As of September 2017, Ant Financial unveiled its facial recognition payment technology through its Alipay services.



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